Netflix, Inc. has become the world’s leading internet television network. The company has over 93 million members in over 190 countries that watch more than 125 million hours of television and movies per day. (Netflix Annual Report) They are constantly enhancing their content library and have even included more original programming produced by Netflix which has garnered awards such as Emmy, Golden Globe, and Academy Award. Netflix makes it a priority to improve their user interface to allow more inter connected devices and even this past year added downloads for offline viewing.
This paper will provide a microeconomic analysis of Netflix. The different criteria that make up this analysis include the supply and demand conditions, the price elasticity of demand, the costs of production, overall market, and finally a recommendation on Netflix’s future production. Currently, Netflix is at the top of
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Blockbuster declined to purchase Netflix, a decision that would eventually spell the demise of Blockbuster. In 2002, Netflix decided to take its company public with an initial public offering (IPO) on NASDAQ under the ticker “NFLX”. At that time Netflix also changed its name to Netflix, Inc. By 2005, Netflix had expanded its membership to total 4.2 million members. In 2007, Netflix introduced its video streaming services, which allows members to instantly watch television shows and movies on their personal computers. (Netflix, Inc 2017) From 2008-2010, Netflix partnered with several consumer electronics companies that allow Netflix to stream on their devices through an Internet connection. In 2010, Netflix made its first expansion out of the United States when they moved into Canada. As of 2016, Netflix is available worldwide except in China, which does not allow U.S. companies to